The web giant, led by Eric Schmidt, has been under fire over its corporate tax avoidance in Britain in recent months but there has been no evidence that the row has deterred consumers or advertisers.

Britain remains Google’s biggest market outside America and generated 10% of global revenues, down from 11% a year ago. The weaker UK performance was part of a wider trend as Google disappointed Wall Street by missing expectations and the shares fell 5% in after-hours trading.

Google boss Eric Schmidt
Group revenues rose 1% quarter on quarter to $14.11 billion, a 19% rise year on year.

Google suffered from a drop in the amount of money it received from advertisers each time a user clicked on an ad. Average cost per click fell 2% quarter on quarter and 6% on a year ago. Analysts said the web giant was being hit by lower ad rates on mobile devices as people use smartphones which have a smaller screen for ads.

Google is the subject of a new Hollywood movie, The Internship (starring Vince Vaughn and Owen Wilson, above), about two men in their forties doing work experience at the web firm.

Microsoft announced it has taken a $900 million hit on unsold Surface tablets as it disappointed investors with its second-quarter figures.

The US tech giant said revenues for the period had risen 10% to $19.9 billion, which was lower than Wall Street had expected.

“That’s the biggest miss we’ve ever seen from Microsoft, the biggest that I could remember,” said Pacific Crest Securities analyst Brendan Barnicle, as its shares fell 5% in after-hours trading.